New guidance on Colorado’s Equal Pay for Equal Work Act
The Colorado Department of Labor and Employment recently issued revised guidance on the Equal Pay for Equal Work Act (EPEW), a state law that took effect January 1 of this year. The notice provides additional guidance on the Equal Pay Transparency rules, which accompany the Act. The Department issued the guidance to close up certain loopholes in the Act that have appeared since it went into effect.
What do the Act and the Equal Pay Transparency Rules require?
The policy goal of the Act is to prevent future pay disparities between men and women who are doing the same work and to prohibit companies from using a job applicant’s pay history to set his or her compensation in a new position. Among other things, the Act requires Colorado employers to pay men and women equally for doing the same work (with some exceptions allowed, such as union seniority rules). It also requires employers to notify current employees of promotion opportunities and provide them information on compensation and benefits in any job posting, whether paper or electronic in form.
Why the new guidance?
You may have seen a change this year in most job listings on websites such as Indeed.com: most now include a compensation range and a general list of benefits, such as health insurance, vacation, 401(k), etc.
With the start of the COVID-19 pandemic in 2020, more employers have allowed employees to work remotely. Sometimes “remote” has meant from the employee’s home a few miles from the office, but at other times “remote” has meant across the country. Many employers do not wish to disclose their pay ranges for a given position and have included language in job postings that the position may be performed remotely, “except for Colorado,” in an effort to avoid disclosing salary information. For example, a job posting on Indeed.com from Apria Healthcare (now expired) included the following: “Job is intended to be performed outside of Colorado” and did not list a pay range. The website www.coloradoexcluded.com includes a list of companies and their job listings that have similar language. The companies include many large employers such as Accenture, AIG, Hallmark, Genentech, Nike, Oracle, and Samsung.
Keep in mind that most companies do include the required information, and some of those on the coloradoexcluded.com list have revised their postings to include the required information. Nevertheless, the Department of Labor and Employment felt it necessary to issue the recent clarification to employers.
What does the guidance say?
The Department revised the guidance, knowns formally as Interpretive Notice and Formal Opinion (“INFO”) #9, in July, to address this issue, among others. It advises that the out-of-state employer exception to the EPEW Act is a narrow one, and only applies to jobs that are “to be performed entirely outside Colorado” (for example, working as a waiter in a restaurant in Wyoming). The INFO specifically states that the out-of-state exception does not apply to remote work that could be performed in Colorado or anywhere else. Therefore, even if the employer states in the job posting that it will not consider Colorado applicants, it must still include the required information (or a clear link to it) on compensation and benefits if it could be performed in the state.
In addition, INFO #9 clarifies that employers must state the range of the job’s compensation in the posting, for example $60,000-80,000, not just a minimum (“$30,000 and up”) or a maximum (“up to $60,000”).
Penalties for violating EPEW
If the Department receives a complaint or information that is an employer is violating the Act’s requirements it may start an investigation of the employer. If the Department then determines the employer did violate EPEW, it can order the employer to take steps to come into compliance and can also impose fines of from $500 to $10,000 for each violation. Failing to include the required information in even one job posting is a violation subject to these penalties.
What employers should do
It would appear that some employers were including the language in postings that they would not consider Colorado applicants for remote positions mainly because they did not want to divulge salary information. Now, if the job can be performed within Colorado, employers must disclose that information. Employers should make sure they are complying with the requirements of EPEW, now that the Department has issued revised guidance. It does not matter if the employer is not incorporated in Colorado or has offices in the state. If they do business here, or are posting positions accessible to Colorado residents, they must comply if the job can be performed within the state.
If you have questions, please contact Mark Spitz at Spitz Legal Counsel, 720-575-0440 or mark@spitzlegalcounsel.com.v